What is Ripple?
Ryan Fugger developed Ripplepay in 2004 which was the former to Ripple, The main difference between Ripple and its rival cryptocurrencies is that it is centralized, this is a criticism of the cryptocurrency by some individuals in the digital currency world.
Ripple was released in 2012 with the intention of sending global payments of any size securely, instantly and at much lower costs. Also known as the Ripple Transaction Protocol (RTXP) they are specifically targeted at the financial industry, they have tailored their technology to fit in with a bank’s current infrastructure making it an extremely exciting prospect in the crypto world.
Ripple may eventually replace SWIFT, the current system in use across the banking industry. SWIFT payments can take 4-5 days to send in comparison to the Ripple Protocol which takes on average 3.5 seconds to send and can handle up to 1000 transactions every second.
Ripple works by users making payments either in their own fiat currencies or in Ripple’s own currency (XRP), payments in XRP will be directly on the Ripple ledger. Payments in other currencies will simply be converted into Ripple for the payment then the ledger will take into account what is owed between the parties.
There are 100 billion Ripple(XRP) created however only around 38 billion in circulation, the other 62 billion are held by Ripple which has caused concerns over the fact they could just sell them which would in turn ruin the cryptocurrency and the business model.
In answer to this Brad Carlinghouse, the CEO of Ripple announced that 55 billion Ripple would be placed in 55 different escrow contracts each containing 1 billion Ripple and would be released over the course of 55 months. This would mean 1 billion Ripple per month would be being released for use and whatever isn’t used would be placed back into escrow at the back of the queue.
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